Bargain Buying Explodes! Ethereum Open Interest Hits All-Time High

▲ Ethereum (ETH) ©Go Dasol

Ethereum failed to recover to $2,300 amid increased selling pressure in the spot market, but bargain buying has revived in the derivatives market, simultaneously increasing expectations for downside defense.

According to investment media FXStreet on May 13 (local time), Ethereum (ETH) traded around $2,260, as selling pressure increased due to signs of a rift in peace talks between the US and Iran and a surge in international oil prices. In particular, exchange holdings increased by approximately 623,000 ETH from May 5 to 13, signaling increased selling pressure in the spot market.

The media analyzed that this selling trend was mainly observed among whale investors holding 10,000 to 100,000 ETH. This group of wallets reduced approximately 390,000 ETH since May 7, marking the largest distribution movement since late March. Wallets holding 100 to 1,000 ETH, which tend to be individual investors, also sold 110,000 ETH over the past week. Conversely, wallets in the 1,000 to 10,000 ETH range accumulated an additional 67,000 ETH during the same period, indicating some bargain buying activity.

US investor sentiment also showed a contracting trend. The Coinbase Premium Index remained in the negative zone, reflecting bearish sentiment among US investors. Furthermore, according to SoSoValue data, Ethereum spot ETFs recorded net outflows for two consecutive trading days, with cumulative outflows reaching $130.6 million. FXStreet diagnosed that the selling-dominant trend is strengthening across the spot market.

On the other hand, signs of bargain buying were also observed in the derivatives market. Ethereum futures open interest increased to an all-time high of 15.5 million ETH, and funding rates continued their longest positive streak since January of this year. This means that long-position investors are actively buying during the recent downtrend. Lookonchain, a smart money tracking account, also reported that large investors expanded ETH long positions and made spot purchases in recent hours.

Technically, a short-term bearish trend persists. Ethereum is currently trading below its 50-day Exponential Moving Average (EMA) of $2,273, with the 20-day EMA at $2,307 and the 100-day EMA at $2,352 forming strong resistance levels. The Relative Strength Index (RSI) has fallen to around 45, indicating slowing momentum, and the Stochastic indicator has entered the oversold zone. FXStreet suggested $2,211 and $2,107 as lower support levels, analyzing that further declines could open up to the $1,909 and $1,741 range.

However, for a bullish reversal, recovering the 50-day EMA and 20-day EMA was presented as a primary task. It explained that only after breaking through the 100-day EMA and the $2,388 horizontal resistance level would the possibility of testing the $2,746 upper resistance open up. FXStreet assessed that the current Ethereum market has entered a phase where spot selling pressure and derivatives market bargain buying are clashing.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*